Insuring Nature to Ensure It Protects Us

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When you hear the word ‘nature,’ what do you think about? A pristine beach? A city park? Maybe your favorite wild animal?

Nature means different things to different people. But do you think
of nature as a powerful source of protection from storms, rising sea
levels and other negative impacts of climate change? If you don’t, then
you should.

June 1 marks the start of the 2017 Atlantic hurricane season. And
with warming ocean temperatures and rising seas, each passing hurricane
season proves that what we once called ‘natural disasters’ aren’t so
natural anymore.

The National Oceanic and Atmospheric Administration (NOAA) predicts 11
to 17 named storms to hit the Atlantic coast this year. Five to nine of
those could become hurricanes, and up to four could become major
hurricanes (Category 3, 4 or 5 with winds of 111 miles per or higher).

Climate change is no longer a distant threat. We are living with the
reality of it, right here and right now. The impacts of climate
disruption in American states like Louisiana, North Carolina and
California — and around the world — are clear, costly, and widespread as storms, floods and droughts become more severe and less predictable.

An estimated 840 million people around the world live with the risk
of coastal flooding, and for coastal communities, the health of their
economies is directly related to the health of their coastal ecosystems.
For example, in 2012, while Hurricane Sandy did tremendous damage to
the eastern U.S., coastal wetlands likely saved more than $625 million in flood damages across 12 states.

Nature, including coral reefs, mangroves, wetlands, sand dunes and
healthy beaches, are the first lines of defense to slow waves, reduce
flooding and protect coastal people and property. Seawalls, breakwaters
and sand bags often come to mind as traditional disaster preparedness
tools, but these are not the only options. And sometimes they aren’t
even the best option.

Coral reefs protect 200 million people around the world. A healthy
coral reef can reduce 97 percent of a wave’s energy before it hits the
shore, and just 100 meters of mangroves can reduce wave height by 66
percent. These nature-based solutions are cost-effective,
self-maintaining and adaptable to sea-level rise. And they also offer
other benefits to communities that traditional “grey infrastructure”
solutions simply can’t, including improved water quality, fish
production and new ecotourism opportunities.

A healthy coral reef can reduce 97 percent of a wave’s energy before it hits the shore, and just 100 meters of mangroves can reduce wave height by 66 percent.

Economists, engineers, insurers and conservationists are together
developing new science, models and strategies to evaluate and leverage
the protective services of this natural infrastructure, including coral
reefs and beaches, and to make sure they can be restored after a
damaging storm.

Indeed, one of the most promising new developments to maximize the
value of nature, like reefs and beaches, is the possibility of actually
putting an insurance policy on it—to protect the health and protective
services of these ecosystems and ensure they are restored after extreme
storms hit. This combination of insurance and new science for protecting
and improving the heath of reefs and beaches so they can continue to
protect us, is a powerful one.

The increased threats of severe storms and climate impacts are here
today. So too are replicable and scalable nature-based solutions. We
need action at all levels, from the international to the local, to shift
our behavior and thinking around nature and invest in it at a level
commensurate with the value it provides us.

We have the opportunity, with eyes wide open to the threats of
climate change and severe storms, to look at the full suite of solutions
available to us to protect and sustain coastal communities and
economies. And as this hurricane season is upon us, that includes taking
a closer look at the potential of insuring nature to ensure nature
keeps protecting us.